What Should I Offer on a Property?
Figuring out what to offer on a property is one of the most important parts of any real estate deal.
Free to start. No spreadsheets.
What It Is & Why It Matters
What it does
The Maximum Allowable Offer (MAO) formula calculates the absolute highest price you can pay while still securing your target profit margin after factoring in renovation costs.
Why it matters
Guessing your offer puts your margins at risk. A precise offer protects your capital and separates emotional buying from mathematical investing.
How It Works
Enter deal info
Input the purchase price, ARV, and rehab estimates into our system.
Review deal grade
Instantly receive a computed deal score and risk assessment grading the investment.
Get your offer & strategy
See exactly what you should offer to hit your margin, alongside negotiation tactics.
Most investors lose money here — avoid these mistakes:
- Ignoring holding + closing costs — shrinking your profit without realizing it
- Relying on automated estimates instead of accurate local comparable data — leading to flawed pricing and missed opportunities
- Underestimating rehab costs just to make a deal look better — turning a “good deal” into a loss
Example Scenario
Scenario: An investor finds a distressed property with an After Repair Value (ARV) of $300,000.
The Math: They want a solid margin, targeting 70% of the ARV ($210,000). The contractor estimates the rehab will cost $40,000.
The Offer: They take the baseline target ($210,000) and subtract the rehab ($40,000) to arrive at a maximum allowable offer of $170,000. Offering anything higher risks the investment.
Real-World Application
If you negotiate based on assumptions, sellers will sense your hesitation. When you anchor your offer to realistic ARV estimates and math-backed rehab costs, you gain negotiation leverage. You transition from hoping they accept your offer to proving why your numbers work.
How to Calculate an Offer Price
Understanding what to offer on a property comes down to one simple principle — buying below market value while protecting your profit.
Most investors use the Maximum Allowable Offer (MAO) formula:
MAO = (ARV × 70%) – Repair Costs
This formula ensures you leave room for profit, expenses, and risk.
Real Example of an Offer Calculation
Let's break it down with a real-world scenario:
Property ARV (After Repair Value): $300,000
Target (70% Rule): $210,000
Estimated Rehab Costs: $40,000
Maximum Allowable Offer (MAO): $170,000
This means:
👉 Offering around $170,000 keeps the deal profitable
👉 Offering higher reduces your margin and increases risk
Why This Matters
Many investors lose money by guessing or relying on rough estimates.
A strong offer is based on real numbers — not emotion.
When you calculate your offer correctly:
- You protect your profit margins
- You avoid overpaying
- You negotiate with confidence
How InvestorVI Helps
Instead of calculating everything manually, InvestorVI instantly:
- Uses AI comps to estimate true market value
- Calculates your Maximum Allowable Offer based on rehab costs
- Analyzes deal profitability and provides Map Intelligence
- Allows you to save and manage the deal in your CRM pipeline
So you can move faster and invest with confidence.
Analyze the deal. Understand the market. Make the right decision — with InvestorVI AI.
💡 Need More Insight?
You’ve got the numbers — now go deeper.
InvestorVI AI works alongside your analysis — helping you go deeper, validate your numbers, and make smarter investment decisions. Ask anything about your deal and get instant guidance.
"This tool gives you the numbers. InvestorVI AI helps you understand what to do with them."
Ask InvestorVI AI →InvestorVI AI can:
- Break down your deal in plain English
- Estimate risks and hidden costs
- Suggest offer strategies
- Answer real-world investing questions
Stop guessing your numbers.
Get your deal grade, max offer, and strategy — instantly.
Free to start. No spreadsheets.
No spreadsheets. No guesswork. Just clear investment decisions.
You can calculate this manually, or use our deal analyzer.